Tim Worstall

Cheap Booze and Fags

Now this is very interesting indeed:

British shoppers will soon be able to buy cut-price
alcohol and cigarettes from the Continent without leaving home, as a
result of an extraordinary legal test case that threatens to blow a
multi-billion pound hole in the Treasury’s coffers.

The
European Court of Justice is expected to rule next week that goods can
be bought in other EU states and delivered to the door while only the
duty levied in the country of origin is paid. This is often a fraction
of that charged in Britain.

If, as appears likely,
the court rubber-stamps a previous adjudication by its advocate
general, shoppers will be free to use the internet or mail order
companies to find the best bargains around Europe and have them shipped
home for their own consumption.

I have been arguing since around 1994 that this is in fact what the law says. I’ve been through the Commission and had them agree, on the telephone, that it was indeed what the law said. They refused, however, to put it into a letter, written proof that that was what they thought the law said. I’ve also been bugging customs for years, trying to get them to give me their interpretation of the law.

When I actually explain through all of it, they again refuse to provide a written interpretation.

Glad someone has brought this piece of law to the court: there really is only one way they can rule on it.

However, do not get your hopes up too much. You will not be able to purchase booze and fags from one integrated company who will then deliver them to your door. For the retailer, duty must still be charged in the country of delivery. The key is that such goods are described as ‘personal imports’. There’s absolutely no damn reason why such things should have to actually be carried personally: but the transport must be organised personally.

So, the loophole, if you wish, is that you purchase the goods and have them delivered somewhere in the low tax country.  Then, separately, you have them transported to you.

Gonna be iteresting to see what they say on November 23 rd.

In

6 responses

  1. MarkS Avatar
    MarkS

    Ah… free trade and free movement of goods. But hang on a minute! This wasn’t how it was supposed to work. We were supposed to be joining a political union, one that favoured the elite but still allowed individual states to gouge their own populations with hideously high taxes. Mind you, it’s not just Britain who are resisting real free trade. In Portugal they still insist on taxing cars bought from other european states. It’s illegal and has been ruled so by the European Commission. Does the Portuguese government comply? Does it hell? They’re making too much money from it. Same goes for their laws on capital gains on property. They’re supposed to let people reinvest profits in another principal residence without tax. They do… as long as it’s in Portugal. You can’t reinvest it in another European state. They’ve been told by the EU to stop it but to no avail. That’s what’s wrong with the EU. It’s selective in its free trade. Member states break rules and the stability pact and bugger all happens about it. A real shambles.
    Rant over. Sorry.

    Reply
  2. MarkS Avatar
    MarkS

    I think I know what the government will say. “Fine… if you think that reducing the price of cigarettes and booze is more important than building hospitals. The money “lost” will have to be made up somewhere else, probably by the poor in society… blah… blah… blah.”
    No! How about you cut down on some waste and sack a few hundred thousand public sector workers or put an end to expensive foreign wars. Just a thought. Cheers.

    Reply
  3. Francis Avatar
    Francis

    I see a business opportunity (for people like you and me I guess) here…. what is the cheapest reliable bulk parcel service I wonder

    Reply
  4. Neil Craig Avatar
    Neil Craig

    Normally a fre trader but I think that, if you accept the need for some taxes, those on cigarettes & alcohol, both substances which do harm are pretty worthwhile. The effect of this is going to be to give a great incentive to any country to reduce these taxes & we are going to have a race for the bottom rate, even though no individual country wants such. The alternative will be the EU setting rates for everybody, which isn’t more attractive.
    I would prefer excise on harmful products to be under the individual state’s control along with how they enforce it.

    Reply
  5. Mark S Avatar
    Mark S

    But why such penal rates of duty? It’s not just alcohol and tobacco, though. What about our petrol duty? It’s easy to just keep taxing stuff instead of concentrating on efficiency and better service delivery. Maybe lower excise duty would make the government think about waste and unnecessary expenditure.

    Reply
  6. john trenchard Avatar
    john trenchard

    “but the transport must be organised personally.”
    simple way to comply with that – have a choice of courier on your Latvian Cigarettes R Us website – “DHL or Postal?” – click – YOU have organised that.

    Reply

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